Design and Build Contractor's Liability

Previous case lawhas indicated that in the absence of any contractual indication
to the contrary, a design and build contractor will be obliged to ensure that
its works are reasonably fit for purpose.

The main rationale being that design and build contractors
should be equated with sellers of goods, not that of professional advisers. Statute
dictates that under a supply of goods contract, goods must be of satisfactory
quality and reasonably fit for purpose. Whereas under a contract for the supply
of services, the services need only be carried out with reasonable skill and
care.

However, this can be contrasted with the case of
Trebor & Cadbury v ADT.

ADT provided a fire suppression system for Cadbury's popcorn
factory. A fire developed which the system failed to extinguish.
The High Court found that ADT had failed to exercise reasonable skill and care
in designing the system. However, the Judge found that Cadbury had
contributed to its own loss and reduced the damages by 75 per cent.

Cadbury appealed. It argued that ADT's system was a
supply of goods and therefore subject to the statutory requirements of
satisfactory quality and fitness for purpose. Crucially, as these went
further than the duty to exercise reasonable skill and care, this would
preclude any defence of contributory negligence so that ADT would be 100 per
cent liable.

The Court found that the system was not 'off-the-shelf' and
rejected the argument that what was being provided equated to goods. The
most important thing that ADT did was to decide to use a particular piece of
equipment in a particular location - this was design.